Hedge funds against Obama

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Class warfare has been the topic du jour this year and is likely to be a major theme of the 2012 election. In a speech two weeks ago, President Barack Obama blasted his Republican foes and Wall Street as he portrayed himself as a champion of the middle class.

In a speech meant to echo a historic address given by former President Theodore Roosevelt in the same Kansas town more than 100 years ago, Obama railed against “gaping” economic inequality and pressed the case for policies he insisted would help ordinary Americans get through hard times.

Not surprisingly, some hedge fund managers were none too pleased.

In fact, hedge-fund industry titan Leon Cooperman “front-ran” Obama’s populist speech by widely circulating an “open letter” to Obama, arguing that “the divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them.”

The Omega Advisors founder went on to say, “To frame the debate as one of rich-and-entitled versus poor-and-dispossessed is to both miss the point and further inflame an already incendiary environment.”

Cooperman is not alone in his positing Obama as an enemy of Wall Street’s elite. Other hedge fund managers who have either publicly criticized Obama or raising money to defeat him include John Paulson, Dan Loeb, Cliff Asness and Paul Singer. Many hedge fund managers are lining-up to raise money for Mitt Romney, who made his fortune working at private equity firm Bain Capital.

But is the environment really that bad for hedge fund managers?

That’s the question nagging at other hedge fund managers, including James Chanos, founder of Kynikos Associates, whose $6 billion hedge fund specializes in betting on a decline in stock prices.

“I keep asking my hedge fund compatriots, ‘Just how bad has your life been under Obama?,” says Chanos, who remains an unabashed Obama supporter. ’Yes there may be some rhetoric and you might feel a little disappointed that the White House isn’t returning your phone calls, but at the end of the day, How bad has your life been?”

The top 25 hedge fund managers for 2010 raked in a some $22 billion in compensation in 2010, according to AR Magazine. It’d be interesting to see what this year brings, given the stomach-wrenching equity and currency markets. Keep in mind though that in 2008, a down year for the stock market, 25 top managers reaped $11.6 billion in pay, or an average of $464 million apiece.

“The stock market is up a ton since Obama took office, tax rates have not gone up, and, by and large, the hedge-fund industry was treated very, very lightly under Dodd-Frank and I think correctly so,” Chanos added. “I don’t get a good answer. It’s, ‘Well, he’s promoting class warfare.’ I happen to agree with Warren Buffett, Class warfare is over. Our class won!”

Yet most of Chanos’ peers don’t see it that way. Instead, they have gotten themselves in a lather over Obama’s calls to tax private jet usage and raise the tax rate on carried interest—something that will hit managers of hedge funds and private equity firms in the wallet. Others rail against the Obama administration’s push for financial reform, even though hedge fund got off generally light in the regulatory reform law known as Dodd-Frank.

Many hedge fund managers grumble that the Obama administration is simply not a friend of business and imposing too much regulation that is stifling growth. Art Steinmetz, chief investment officer of OppenheimerFunds: “People really think Dodd Frank is the step in the wrong direction. So for those vociferous denials that regulatory costs aren’t burdening on our business, I for one would respectfully disagree with that.”

And of course it’s not just hedge fund managers that are angry with Obama.

When he first ran for president, employees of Goldman Sachs gave donated nearly $1 million to Obama. But this around it’s a different story, with Romney far outpacing Obama in getting donations from Goldman workers. A source familiar with the situation say some of that stems from the fact that Gary Cohn, Goldman’s president, is a fierce critic of Obama.

Then again maybe none of this is surprising that money manager and Wall Street types would find more in common with Romney, a man who comes from their world. It’s certainly understandable that finance types would favor a finance type for president.

But what’s hard to square is anyone in hedge fund-land or on Wall Street saying they have been the ones suffering the most in the wake of the worst financial crisis since the Great Depression.